Reading candlestick charts

One candle, four prices

Each candle on a chart summarises trading over a fixed period, such as one minute, one hour or one day. It shows four values, usually abbreviated OHLC:

• Open — the price of the first trade in the period.
• High — the highest price traded during the period.
• Low — the lowest price traded during the period.
• Close — the price of the last trade in the period.

Body and wicks

The thick part of the candle is the body. It spans the distance between the open and the close. The thin lines above and below are the wicks (sometimes called shadows). The top of the upper wick marks the high; the bottom of the lower wick marks the low.

Colour tells you direction. On most charts, a candle that closed higher than it opened is shown in green or hollow, and one that closed lower is shown in red or filled. Colours can usually be changed in chart settings, so always check which convention you are looking at.

Worked example

Imagine a one-hour candle on ETH-USDT with these made-up values:

Open	High	Low	Close
3,000	3,080	2,960	3,050

The close (3,050) is above the open (3,000), so this is a rising candle. The body runs from 3,000 to 3,050. The upper wick reaches 3,080 and the lower wick reaches 2,960. In words: during that hour the price dipped to 2,960, climbed as high as 3,080, and finished 50 USDT above where it started, having given back some of its peak.

What shapes can suggest

Traders read candle shapes as a record of the tug-of-war between buyers and sellers. Some common descriptions:

• Long body, short wicks: price moved steadily in one direction for most of the period.
• Small body, long wicks: price travelled a long way both up and down but ended near where it began, pointing to indecision.
• Long lower wick: sellers pushed the price down, but buyers brought it back up before the close.
• Long upper wick: buyers pushed the price up, but it fell back before the close.
• Doji: open and close are almost equal, leaving a very thin body.

These are descriptions of what happened, not forecasts. The same shape appears in many different contexts, and it is followed by rises and falls alike.

Timeframes change the picture

A single daily candle contains twenty-four hourly candles, and each hourly candle contains sixty one-minute candles. A move that looks dramatic on a one-minute chart may be a small ripple on a daily chart. It is worth checking more than one timeframe before drawing conclusions about the overall direction.

Volume: the missing context

Most charts show a volume bar beneath each candle. Volume measures how much of the asset changed hands during that period. A large candle on very little volume may reflect a thin order book rather than broad interest, while a similar candle on heavy volume shows many participants were involved.

Common pitfalls

1. Reading the live candle as final. The current candle keeps changing until its period ends. Its shape can look very different a few minutes later.
2. Seeing patterns everywhere. With enough candles on screen, it is easy to find a shape that seems to confirm what you already believe.
3. Ignoring wider conditions. Charts do not show news, network events or changes in liquidity. Our guide to understanding volatility explains why prices can move sharply without warning.

Practise reading charts

The best way to get comfortable is to watch candles form in real time. The trading terminal at /trade/ shows live charts, and its practice account uses virtual funds only, so you can switch between timeframes to see how the same price action looks at different scales. Current pairs are listed on the markets page.

Crypto assets are highly volatile and you may lose all the capital you invest.